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Financial Advisor of the Future: High Tech and High Touch


June 15, 2020

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6 min read


Future of Financial Advisory

Where is the future of Financial Advisory headed? What happens when baby boomers’ kids who want nothing to do with their parents’ financial advisor inherit their wealth? Why pay an advisor a fee when you can easily build a personalized investment portfolio online for a fraction of the cost via Robo-advisors? 

These are just some of the worries that are plaguing the financial advisory industry.

Automation has always been seen as a threat to the job security of advisors, but that may not be the case afterall. The demand for personal financial advisory is growing and will continue to grow stronger as income levels and savings rates rise; increasing the demand for financial assets at the same time.

With recent news of the US personal savings rate hitting its highest level in 39 years, the wealth management industry is poised for skyrocket growth.

Financial Advisor’s Ally 

According to a survey conducted by Capgemini, financial advisors spend 67% of their time engaging with clients. While 29% of their time is used to perform administrative tasks. Leaving only 4% to perform productive tasks such as monitoring and rebalancing client’s portfolios.

Source: Capgemini

However, all these mundane and repetitive tasks can go away with the help of a Robo-advisor. Automation can help wealth management firms: 

  1. Increase advisor’s productivity 
  2. Improve operational efficiency
  3. Improve advisor-client relationship 
  4. Increase market share and improve reach 
  5. Assist in the delivery of simple and complex financial services 

Shift in Consumer’s Expectations 

Now that financial advisors are relieved of the repetitive mundane tasks, they can focus more on enhancing client experiences. A research by Salesforce found that 84% of respondents expect very highly of customer experience, to the extent that it holds the same importance as the products or services. 

Source: Salesforce

Just as how technology has evolved, client’s expectations have done so as well. It is no longer enough to just deliver an extraordinary product, customer’s experience is just as important. Therefore, the integration of automation in financial services will enable financial advisors to deliver the finest customer experience while retaining high productivity. 

Digital Consumers 

Even though technological advancements have been going on for years, companies are still having trouble keeping up with the digital change – including wealth management firms. Unfortunately for the firms, these changes are inevitable and will not stop, especially with digital consumers as the driving force behind it all. 

In 2019, Ernst & Young surveyed 2,000 investors across 26 countries on various topics surrounding the wealth management scene. This is what they found. 

Source: Ernst & Young 2019 Global Wealth Management Report

So what does this tell us about consumers’ behaviour? First of all consumer’s behaviour is definitely evolving and it’s evolving fast. 

In 2016, 18% of clients used mobile applications as their primary channel with a projected 6% increase by 2018. And once again, as consumers, we underestimated the rate of change. The actual percentage of clients who use mobile applications doubled from the amount in 2016. Coupled with those who prefer website access, ⅔ of clients prefer digital platforms as their primary channel. 

Smart phones have only become smarter. Everything can be done at the touch of a button, from grocery shopping to finding jobs. The convenience and efficiency are the main drivers behind increasing preference from clients. 

As clients drift towards mobile, first-generation channels such as websites are becoming obsolete. Projected to stay constant at 38%, the actual numbers would beg to differ. In less than three years, the preference of websites as a primary channel dropped by a third. 

These numbers are the average across all wealth management activities. Hence, will the number differ when we dive into the specific activities? 

The answer is no. 

Source: Ernst & Young 2019 Global Wealth Management Report

The gap is even wider. Although a large portion of the clients use mobile applications for basic tasks, there has been an increasing popularity in using apps for advanced activities as well- such as portfolio management, and advice-related tasks. 

These percentages are expected to increase over the coming years with advancement in wealth management tech and ease of use for clients of all ages. 

Another compelling observation found that in correlation with the complexity of tasks, client’s preference for digital assistant or chatbot increases as well. 

A survey conducted in 2018 found that only 1.4% of respondents are currently using digital assistants. However, it is projected to increase eight times the amount in the future. The demand for digital assistants is not restricted to only simple tasks. Clients are actually more inclined to use digital assistants for complex tasks such as advice-related activities. 

High Touch Engagement

Nonetheless, the need for traditional advisors is still prevalent. High touch engagement is even more important during volatile time and major life milestones. Looking at the results from the survey below, we can see that for all major life stages, more than half of the clients are looking to use advisory services. 

Why is this so? 

As human beings, we fear uncertainty and major life changes are full of it. When faced with such changes, clients search for trustworthy advisors to help them navigate through the murky waters of life. However, the demand of human interaction can vary depending on types of clients. Clients with more complex financial strategies or situations request for more human interaction. 

To many people’s surprise, the demand for face-to-face meetings actually decreases with wealth. The rate of mass affluent demand for such services is nearly double the rate of the ultra high net worth clients- 11.7% and 6.5% respectively. This counters the general perception that automated services are for the mass affluent.

Source: Ernst & Young 2019 Global Wealth Management Report

What’s Next?

Integrating automation does not mean eliminating human advisors completely. Yes, consumers are shifting more towards digital as a primary channel. However, there are some clients who require the help of a traditional financial advisor. 

It is said that the absence of emotions is one of Robo-advisor’s biggest strengths. But in times of uncertainty, clients need someone who can empathize with them and reassure them by providing that human touch. 

So what does this mean for firms? Do they move to digital or remain the same? 

Well, both. It is all about balancing high tech and high touch services. Through harnessing state of the art technology, firms can improve productivity and automate the repetitive tasks. As a result, advisors can focus on delivering high quality engagement to clients who desire the human touch. 

According to a Deloitte survey, 66% of consumers seek a self-directed journey. Providing the omnichannel delivery will enable consumers to lead their own journey and choose how they want to interact with the wealth management firms. 

Those who prefer little to no human interaction can opt for the full digital experience. Whereas, clients who seek to consult a financial advisor still have the option to do so; providing the best of both world experience for the modern clients. 

This is truly the financial advisor of the future.


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